Risks of Hiring Workers Not Authorized to Work in the United States

When it comes to employment, hiring immigrants who live but are not authorized to work in the United States can greatly increase your liability if they are injured on the job. 

Since each state’s workers’ compensation system operates independently, laws can vary from one jurisdiction to another and greatly affect employer considerations on this matter. To avoid liability issues, it’s important for you to verify that every employee you hire is legally able to work in the country.

Potential Liability

Many employers mistakenly believe that when workers lacking work authorization are disqualified from their workers’ compensation plan, employers will save money in premiums and claims dollars. 

However, in reality, workers’ compensation programs are no-fault protection programs that provide a degree of protection to employers. 

Workers’ compensation protects employers by preventing injured employees from being able to take certain types of legal action against their employers for their injuries and by limiting the amount injured employees can recover to predetermined wage replacement and medical care benefits. 

Without this coverage, injured workers who are not covered by a workers’ compensation program (including those who are not legally allowed to be employed in the country) could file a tort liability lawsuit against their employer for pain and suffering and other losses in addition to lost wages and medical costs. Because workers’ compensation benefits are normally limited or scheduled in some way, a tort liability suit could be significantly more costly for you as the employer.

Whether your state’s workers’ compensation laws offer coverage to immigrants without work authorization can vary on a case-by-case basis. As concern over the issue grows, more focus has been put on employers and how they contribute to the employment of immigrants.

Government Involvement

In 1986, Congress enacted the Immigration Reform and Control Act (IRCA). The IRCA’s primary goal is not to penalize the immigrants working in the country illegally by denying them workers’ compensation coverage; instead, it aims to stop the opportunity for their employment by penalizing the employers who knowingly hire them. 

The IRCA puts the bulk of the responsibility of verifying an employee’s legal ability to work in the United States on the employer. Those who fail to perform a proper check or knowingly hire immigrants who are not authorized to work in the country could face fines, loss of business license, criminal penalties and loss of workers’ compensation coverage. In some cases, this loss of coverage could allow an injured employee to sue for damages that would far exceed normal workers’ compensation payments.

Know Whom You Hire

To avoid loss of coverage and potential legal action, it’s important to establish a system to verify the legal status of potential employees. This system should include the following:

• Ensuring that each new employee fills out an I-9 form, which is required by the federal government for legal employment
• Contacting your local Motor Vehicle Department to validate driver’s license or state ID numbers
• Opening a free online account with the Social Security Administration to validate numbers provided to you by job applicants

Conclusion

Workers’ compensation coverage for employees who are not authorized to work in the United States varies from state to state. In some cases, lack of coverage for these individuals may expose employers to higher litigation risks. 

For this reason, employers should thoroughly understand their responsibilities and liability in workers’ compensation coverage when hiring immigrants. To avoid possible coverage issues, employers should consult with their insurance provider and seek legal advice to understand the work authorization status of immigrant employees.